Full Judgment Text
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CASE NO.:
Appeal (civil) 7986 of 2004
PETITIONER:
General Manager, Indian Overseas Bank
RESPONDENT:
Workmen, All India Overseas Bank Employees Union
DATE OF JUDGMENT: 10/03/2006
BENCH:
ARIJIT PASAYAT & ARUN KUMAR
JUDGMENT:
J U D G M E N T
ARIJIT PASAYAT, J.
The Indian Overseas Bank (hereinafter referred to as the
’Bank’) calls in question legality of view expressed in a
judgment rendered by the Industrial Tribunal, Tamil Nadu,
Chennai(hereinafter referred to as the ’Tribunal’) which was
affirmed by learned Single Judge of the Madras High Court.
The judgment of the Division Bench is the subject-matter of
challenge in this appeal.
The core question which falls for adjudication in this
appeal is whether "jewel appraisers for loans" are to be treated
as workers and are to be absorbed as part time clerical staff of
the Bank. Stand of the appellant is that jewel appraisers are
not employees of the bank and do not do any substantial
work.
Background facts in a nutshell are as follows:
The bank on the basis of contracts had employed about
767 jewel appraisers mainly in the rural branches in the
States of Tamil Nadu, Pondicherry, Andhra Pradesh,
Karnataka, Kerala and few branches in Bihar and Orissa.
Bank advances agricultural loans to its constituents and also
members of the staff. The All India Indian Overseas Bank
Employees Union (in short the ’Union’) raised a dispute taking
the stand that the jewel appraisers engaged by the bank are
part time workers of the bank. On the basis of the demand
raised reference was made by the Central Government and on
19.2.1990 following dispute was referred to the Tribunal for
adjudication:
"Whether the demand of All India Overseas
Bank Employees Union to treat the jewel
appraisers engaged by the Bank as part time
workmen of the Bank is justified? If so, to
what relief, if any, are they entitled?"
In support of the demand the stand taken was that the
jewel appraisers employed for particular branches of the bank
are also utilized for certain clerical jobs like entering
applications for jewel loans. They are also to go other branches
as to the appraisers of the jewel. These jewel appraisers are
required to be present in the respective branches between 10
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a.m. to 2.00 p.m. as a request for jewel loan is considered and
granted only during that period. They are paid a commission
of Rs.3/- for every one thousand rupees sanctioned by way of
loan. Reference was made to another dispute i.e. ID 25 of 1997
raised by jewel appraisers numbering about 353 in Indian
Bank where a reference had been made to the Tribunal. The
reference reads as follows:-
"Whether the action of the Management of the
Indian Bank, Madras in denying to appraisers
wages and other conditions of service
applicable to rural clerical "Award Staff" of the
Bank is justified? If not to what relief the
workmen concerned are entitled to?"
Reference in that case was made on the ground that the
jewel appraisers of Indian Bank were workmen and they were
denied only wages and other service conditions as they were
paid monthly remuneration of Rs.100/-. The said dispute was
adjudicated and an award was made on 3.12.1979 holding
that the jewel appraisers of Indian Bank are entitled to wages
and other conditions of service applicable to regular clerical
staff as part time employee of the Bank and they would be
entitled to such proportionate (namely half) wages and benefits
of clerical staff w.e.f. 1.4.1977 i.e. the date of reference. The
award was questioned before the High Court which was
dismissed. Letters Patent Appeal was also dismissed by the
Division Bench and S.L.P. was also dismissed by this Court.
Stand of the Union, therefore, was that the view
expressed in the Indian Bank’s case (supra) was clearly
applicable to this case. Claim of the Union was resisted by the
appellant-Bank basically on the ground that jewel appraisers
engaged by the Bank are not workmen as defined in Section
2(s) of the Industrial Disputes Act, 1947 (in short the ’Act’).
Reference was made a decision of this Court in Management of
Puri Urban Co-operative Bank v. Madhusudan Sahu and Anr.
(1992 (II) LLJ 6). Further it was submitted that the Bank has
branches in various states and, therefore, adjudication is
possible only by a National Commission under Section 17B of
the Act and not by the Industrial Tribunal to whom the
dispute was referred. This point was not, however, urged
before the High Court. It was pointed out that terms and
conditions of the jewel appraisers of Indian Bank were entirely
different from the terms and conditions of jewel appraisers of
the appellant Indian Overseas Bank. The Tribunal relied upon
the decision in Indian Bank’s case (supra) and answered the
reference in the affirmative. It made a comparison of the
terms and conditions of the two Banks.
Union filed writ petition claiming that the Tribunal
should have granted relief from 1.4.1978 i.e date of demand.
Appellant-Bank questioned legality of the award by filing a writ
petition. As noted above, the writ petition was dismissed by
the learned Single Judge and the Division Bench in the LPA.
In support of the appeal learned counsel for the
appellant-Bank submitted that in the year 1975 the appellant
started the process of sanctioning loans on deposit of jewellery
and security for which jewel appraisers were engaged who
were paid on commission basis. On 20.1.1983 Government
declined reference because independent contracts covered the
arrangement. The Union filed writ petition before the High
Court which by its judgment dated 22.11.1989 directed the
Central Government to refer the dispute to the Tribunal. The
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Tribunal instead of assessing the evidence and very vital
admissions made by the witnesses examined to further the
case of the jewel appraiser based its conclusions on Indian
Bank’s case (supra). It did not take note of the features
highlighted by this Court in Puri Urban Co-operative Banks’
case (supra). It also referred to a decision in Indian Bank v.
Presiding Officer, Industrial Tribunal etc. (1990(I) LLJ 50),
which had no relevance. Accordingly, the conclusions are
vitiated of non-application of mind. It is pointed out that
though the learned Single Judge held that the Tribunal not
decided the real issues had proceeded to determine the case
himself and upheld the award passed. In the appeal before the
Division Bench it was categorically held in the impugned
judgment that the Tribunal had not adjudicated the correct
issue and for achieving substantial justice the learned Single
Judge rightly adjudicated the matter which was pending for
nearly 26 years. It was held that jewel appraisers are
indispensable for proper functioning of the Bank and also deal
with the clerical job.
It was submitted by learned counsel for the appellant
that the factual scenario in Indian Bank’s case (supra) was
entirely different. Some of the distinguishing features make
Indian Bank’s case (supra) inapplicable. One of the
determinative factors according to him was that the
commission was paid only when the loan was sanctioned even
if the appraisal had been done by the appraiser and the
commission amount was paid out of the sanctioned loan
amount and the payment is made by the borrower and not by
the Bank. On comparison of the works done the Tribunal held
that the work was similar so far as Indian Bank’s case (supra)
is concerned, without noticing that condition no.9 was
conceptually and contextually different. There was no evidence
to show that jewel appraiser did any other work as clerk.
Even if it is conceded for the sake of arguments that some
work was done by the appraiser, it was by way of help to the
loanee. In any event after the Shastri Award there is no
question of any part time clerk being appointed. If the order of
the Tribunal as maintained by learned Single Judge and the
Division Bench is to be maintained, a separate cadre has to be
created to give effect to the orders. The Tribunal referred to
the Tiny Deposit Scheme of Indian Bank’s case without
indicating as to how the same was relevant. The Tribunal
quoted from the judgment of the Madras High Court in great
detail and referred to Ex. "M-3" which relied on some
conclusions of Tiny Deposits Scheme which was not the case
of the jewel appraisers before the High Court. The Tribunal
appears to have quoted from the said judgment of the Madras
High Court and without applying the conditions which were
the subject-matter of adjudication in the said case to the facts
of the present case drew parallel. It was submitted that the
factual scenario in the Puri Co-operative Bank’s case (supra)
was almost akin to the facts of the present case. Therefore, the
ratio has full application in the present case. Reference was
also made to a Full Bench judgment of Kerala High Court in
Canara’s Bank case (1981 (II) LLJ 189) where for the purpose
of the Shop and Commercial Establishment Act jewel
appraisers were held to be not employees.
It was, however, submitted by learned counsel for the
respondent that this was done for the purpose of finding out
the parameters.
It was submitted that the reference was made because
prima facie the Government felt that jewel appraisers were
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workmen under the Act and in that context nature of work,
which was the same as in the case of Indian Bank’s case
(supra), is relevant. The Tribunal has compared the duties and
has given findings of fact regarding nature of duties. It was
held that the jewel appraisers are also doing some clerical
work relating to the job entrusted. Three forums have recorded
findings of fact and, therefore, no interference is called for.
This is not a case where jewel appraisers were asking for
regularization, they were claiming to be part time workers.
There was power of the Bank to supervise and that was the
effective control. The Bank has right to indicate as to in what
manner the work was to be done. In Puri Cooperative Bank’s
case (supra) this Court did not notice an earlier three-judge
Bench decision in Silver Jubilee Tailoring House and Ors. v.
Chief Inspector of Shops and Establishments and Anr. (1974
(3) SCC 498) where the relevance of the end-product was
highlighted. As the bank had the right to reject the report of
the appraiser, that itself was indicative of element of control
and supervision. Therefore, the Puri Co-operative Bank’s case
(supra) should not be followed. Additionally, the said case
related to an individual and issue of workman did not arise
directly.
The stress of learned counsel for the appellant was that
the Bank had always the practice of appointing jewel
appraisers as independent contactors who were free to work
elsewhere and as such are not employees, not subject to
discipline, are not subject to fixed working hours, are not
employed by following any employment procedure and are not
assigned duty outside of their contract, except may be
incidentally filing of form and the like.
Reference to the circular dated 23.8.1975 clearly shows
that the Bank had clearly stipulated that the jewel appraisers
cannot be engaged in other work as they were not regular
employees. On 2.1.1978 another circular was issued by the
Bank that jewel appraisers act on commission basis and hence
are not entitled to do any other work. It appears that the
Tribunal did not analyse the evidence which was produced by
the parties. It merely referred to the factual background in
Indian Bank’s case (supra). The decision of this Court in Puri
Co-operative Bank’s case (supra) was distinguished by
comparing job of the jewel appraisers of the Indian Bank. It
should be noted that the dispute in Indian Bank’s case (supra)
was conceptually different. After accepting that the real issues
were not focused by the Tribunal, learned Single Judge held
that a substantial portion of the Bank’s business was because
of the contribution made by the jewel appraisers without
indicating as to how same was relevant for the purpose of
adjudication. The Division Bench in a very cryptic manner
observed that it had perused the evidence and the documents
which substantiated nature of the job of the jewel appraisers
and they were also doing the clerical job. The circulars issued
by the Bank were not considered relevant and it was noted
that the ratio in Indian Bank’s case (supra) applies.
A few distinguishing facts need to be noted. In Indian
Bank’s case (supra) there was evidence to show that the jewel
appraisers work regularly for four hours. It was clearly
admitted in the instant case by the witness of jewel appraisers
that there were no fixed period of work and they could come
and go at any point of time. In Indian Bank’s case (supra) the
bank had disciplinary control on the jewel appraisers. In the
instant case it was admitted by the witnesses that the Bank
did not exercise any disciplinary control. In Indian Bank’s case
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(supra) conditions were to be fulfilled before any leave was
granted. In the present case the jewel appraisers were not
required to sign attendance register and also were not required
to make any leave application. The most relevant factor in
Indian Bank’s case (supra) was that the jewel appraisers were
paid a minimum amount per month which was somewhat akin
to salary. In the instant case, the amount was paid on
commission basis by the loanee and not by the bank.
A few other facts need to be noted. In the present case as
well as in Puri Co-operative Bank’s case (supra) the jewel
appraisers were required to weigh the ornaments brought to
the Bank for pledge and to appraise quality, purity and value.
The jewel appraisers could be asked to do this exercise but not
the manner in which it was to be done. In both the cases the
respective banks had their lists of appraisers. It was not
obligatory for the Bank to allot work to any particular jewel
appraiser.
Strong reliance was placed by learned counsel for the
respondent in Dhrangadhra Chemical Works Ltd. v. State of
Saurashtra (1957 SCR 152), Silver Jubilee’s case (supra),
Shining Tailors v. Industrial Tribunal II, U.P. (1983 (4) SCC
464), Chintaman Rao v. State of M.P. (1958 SCR 1340).
The inferences culled out from the reading of those
judgments can be summed up as follows:-
(a) Where the contactors were substantially responsible for
the main and sole business, they would be treated as workers.
(b) One exception is that in such cases flexibility of the
contract was at variance with normal worker’s contract the
contractors would not be treated as workers.
(c) Where the contractor is in the nature of supplier of goods
and services, they are to be treated as supplier contractors
and not workmen.
At this juncture the distinction between jewel appraisers
and the regular employees of the bank can be noted.
Regular Employees
Jewel Appraisers
1. Subject to qualification and
age prescribed
1. No qualification/age
2. Recruitment through
Employment
exchange/Banking Service
Recruitment Board.
2. Direct engagement by the
local Manager
3. Fixed working hours
3. No fixed working hours.
4. Monthly wages
4. No guaranteed payment,
only commission paid.
5. Subject to disciplinary
control
5. No disciplinary control.
6. Control/supervision is
exercised not only with regard
to the allocation of work, but
also the way in which the
work is to be carried out.
6. No control/supervision over
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the nature of work to be
performed.
7. Wages are paid by the
Bank.
7. Charges are paid by the
borrowers.
8. Retirement age
8. No retirement age.
9. Subject to transfer
9. No transfer
10. While in employment
cannot carry on any other
occupation.
10. No bar to carry on any
avocation or occupation.
Therefore, the jewel appraisers are not employees of the
Bank.
Above being the position, the judgment of the Division
Bench affirming the views of the learned Single Judge and the
Tribunal is clearly indefensible, deserves to be set aside which
we direct.
The appeal is allowed with no order as to costs.